Correlation Between WT Offshore and Unum
Can any of the company-specific risk be diversified away by investing in both WT Offshore and Unum at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining WT Offshore and Unum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WT Offshore and Unum Group, you can compare the effects of market volatilities on WT Offshore and Unum and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in WT Offshore with a short position of Unum. Check out your portfolio center. Please also check ongoing floating volatility patterns of WT Offshore and Unum.
Diversification Opportunities for WT Offshore and Unum
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between WTI and Unum is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding WT Offshore and Unum Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unum Group and WT Offshore is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on WT Offshore are associated (or correlated) with Unum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unum Group has no effect on the direction of WT Offshore i.e., WT Offshore and Unum go up and down completely randomly.
Pair Corralation between WT Offshore and Unum
Considering the 90-day investment horizon WT Offshore is expected to under-perform the Unum. In addition to that, WT Offshore is 3.61 times more volatile than Unum Group. It trades about -0.03 of its total potential returns per unit of risk. Unum Group is currently generating about -0.03 per unit of volatility. If you would invest 7,584 in Unum Group on October 23, 2024 and sell it today you would lose (86.00) from holding Unum Group or give up 1.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
WT Offshore vs. Unum Group
Performance |
| Timeline |
| WT Offshore |
| Unum Group |
WT Offshore and Unum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WT Offshore and Unum
The main advantage of trading using opposite WT Offshore and Unum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WT Offshore position performs unexpectedly, Unum can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Unum will offset losses from the drop in Unum's long position.| WT Offshore vs. Evolution Petroleum | WT Offshore vs. Ring Energy | WT Offshore vs. Gran Tierra Energy | WT Offshore vs. Permian Resources |
| Unum vs. Prudential Financial | Unum vs. MetLife | Unum vs. Jackson Financial | Unum vs. Manulife Financial Corp |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Commodity Directory module to find actively traded commodities issued by global exchanges.
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